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Steve Kelman on the VA Hospital Scandal

May 20, 2014

By Doug Gavel, HKS Communications

Allegations that administrators in at least one VA hospital doctored the data so as to give the impression that patients were being seen much sooner than they actually were have sparked outrage and calls for reform. Steven Kelman, Albert J. Weatherhead III and Richard W. Weatherhead Professor of Public Management at Harvard Kennedy School, is the author of many books and articles on the policymaking process and on improving the management of government organizations. He is also a regulator contributor to Federal Computer Week. Q:In your most recent blog post, you wrote that “the VA's cheating, if it occurred, happened in the context of the department's performance measurement system.” If the allegations are true, where were the failures in the system?Kelman:There would have been individual dishonesty at the hospital level, in falsifying the numbers. In addition, a well-designed IT database system should not allow a patient to be removed from the database once they are entered; if this wasn’t the case, there was an IT systems failure. However, information about this hasn’t come out yet.Q:Do most federal government agencies now utilize performance measurement systems? When are they most valuable? Kelman:All cabinet agencies must have a small number of “high-priority performance goals” that they are working on – go to www.performance.gov to check. Performance measures are most valuable when we can measure an organization’s results along dimensions that we care about, such as many of the measures actually used in the Veterans Affairs hospital system. Measures are also valuable only if managers and executives use them to improve performance – to motivate and focus employees, and to help the organization learn how to do a better job over time.Q:What measures can administrators take to prevent the manipulation of such reporting data by government agencies in the future? Kelman:The most widely used performance measure in the world is the profit measure for private firms. Given the large amounts of money at stake for financial markets and individual company executives, that measure creates enormous incentives for cheating and gaming. That is why more than a hundred years ago an accounting industry was developed to audit the accuracy of companies' financial performance information. That system is not perfect, but it is hard to imagine that capitalism could function without auditors keeping the level of fraud low for performance measures. As government becomes more serious about performance measurement, the danger of falsification will increase. In some sense, this is a good sign that measurement is being taken seriously. Agency inspectors general are a natural location for such an auditing function.